KANDAHAR, Afghanistan, Oct. 30 — Several hundred Taliban fighters have moved into a strategic area just outside the southern city of Kandahar in recent days and clashed with Afghan and NATO forces, according to Canadian and Afghan officials.

The fighting, which began Tuesday, is the first time large numbers of Taliban have been able to enter the area just north of the city since 2001. Control of the area, known as the Arghandab district, would allow the Taliban to directly threaten Kandahar, southern Afghanistan’s largest city.

Whether the Taliban were looking to establish permanent control over the area or were simply carrying out raids was unclear on Tuesday night. But Canadian military officials said Afghan and NATO forces had begun a "large operation" to drive out the Taliban.

Reports of casualties could not be immediately confirmed. The provincial police chief said 20 Taliban had been killed; the Taliban said they killed two foreign and three Afghan soldiers. Each side denied the other’s claims. "We’re conducting operations in and around Arghandab in response to increased Taliban fighter numbers," said Lt. Commander Pierre Babinsky. "We dedicated a lot of resources to this."

Residents said hundreds of people were fleeing the district because of fears of a major battle. Cars and trucks loaded with families from the area have streamed into Kandahar over the last two days, sparking fear among city residents.

"The people are leaving the village because they are afraid of fighting and bombardment," said Agha Muhammad, a 43-year-old farmer who fled Arghandab on Tuesday. "Today, many families have left their houses."

Sarah Chayes, an American journalist and aid worker who has lived in Kandahar since 2001, said a powerful pro-government leader in the district, Mullah Naqibullah, died of a heart attack two weeks ago. Over the last several years, Mullah Naqibullah survived multiple attempts by the Taliban to kill him, she said, and was "the bulwark" that blocked the hard-line Islamic group from entering Kandahar from the north.

But in a sign of the weakness of President Hamid Karzai’s government in the area, joyous Taliban fighters seized control of Mullah Naqibullah’s home village in Arghandab within two weeks of his death.

"That two weeks later they were in there on roofs dancing — and inside his house — is devastating psychologically," Ms. Chayes said. "It’s like a psychological operation on the part of the Taliban, and I think it’s a very effective one."

David Rohde contributed reporting from Islamabad, Pakistan.